Brazil Ministry of Finance orders immediate suspension of Pixbet

The Ministry of Finance has ordered the immediate suspension of operations at Pixbet, a sports betting company based in Paraíba.

The precautionary measure also establishes the cancellation of ongoing bets and the return of wagered amounts to users.

The decision is part of Operation Arena, launched on Thursday by the federal police, the Public Prosecutor’s office, the Ministry of Finance and the Federal Revenue Service. The action investigates the business group over suspected currency evasion and money laundering through sports betting.

Ernildo Júnior, owner of Pixbet, was approached by federal police agents in Campina Grande on Thursday. The car he was in and his cell phone were seized during the execution of a search and seizure warrant.

G1 contacted Pixbet’s defence team. The lawyers stated they did not have access to the order authorising the operation and that they were “caught by surprise”. The defence also stated that they will comment after having access to the decision.

Non-compliance with SPA regulations.

According to the precautionary measure issued by the Ministry of Finance, Pixbet allegedly failed to comply with the required standards for monitoring and supervising betting companies. It also lacks mechanisms for monitoring compulsive gamblers.

The decision states that Pixbet failed to provide information deemed necessary by the Secretariat of Prizes and Bets (SPA). The company is responsible for the domains “pix.bet.br”, “ganhei.bet.br” and “betdasorte.bet.br”.

“The precautionary measure was taken due to the high risk of harm to bettors and the regulated market,” said SPA in the administrative proceedings for the suspension of Pixbet.

Because of this, the tax authorities have ordered the suspension of operations for websites linked to the company. The measure stipulates that Pixbet can only resume operations after the required information is submitted and SPA proves compliance with the rules.

The measure is not related to Operation Arena by the Federal Revenue Service and the federal police against Pixbet on suspicion of money laundering with crypto assets and offshore companies. That action also took place on Thursday. According to the SPA, the sanctioning processes were already under way before the operation.

The decision mandates that all bets in progress be cancelled. The amounts wagered must also be returned to the bettors.

The Ministry of Finance also established a daily fine of BRL200,000 if the suspension order is not complied with. The company can continue operating in Rio de Janeiro and Paraná, where it holds local licences.

Operation Arena

Operation Arena is investigating a business group suspected of using corporate and financial structures abroad to conceal the origin and destination of money obtained through gambling and sports betting. Pixbet was also targeted in this investigation.

In total, 19 search and seizure warrants were executed in Paraíba, São Paulo, Sergipe, Rio de Janeiro and Paraná. Measures were also ordered to break bank and telecommunications secrecy and to seize up to BRL1.1 billion.

In Paraíba, the Pixbet headquarters in Campina Grande was the target of a search and seizure operation. The home of a man identified as a “front man” for the group was also targeted in the operation.

Those under investigation may face charges of currency evasion, money laundering and other crimes against the national financial system.